Access to affordable housing is a challenge to many public and private sector employees who retire without a home, despite having worked and saved towards a pension.

One of the initiatives by the government to increase access to housing was by amending the Retirement Benefits Act (RBA) to allow pension funds to be used as collateral for the purchase of a home.

The move was billed as a silver bullet in enabling civil servants and workers to own homes.

And two years ago, the Retirement Benefits (Mortgage Loans) – (Amendment) Regulations were enacted allowing members to now redeem up to 40 per cent or Sh7 million of their accumulated benefits to buy a ready residential house from an institution.

However, a study by the Retirement Benefits Authority (RBA) shows that less than 0.1 per cent of members of retirement benefits schemes have taken advantage of the provision.

Despite the amendments, the uptake of Pension Backed Mortgages by employees in Kenya remains low.

But what is holding them back?

Players in the pensions sector believe a host of regulatory and operational hurdles have held back the scheme despite its noble intentions.

The experts argue the uptake of pension-backed mortgages has not significantly contributed to the provision of affordable housing in Kenya in line with their vision.

They recommend vigorous public sensitisation and legal reforms aimed at enhancing and streamlining the use of pension funds for wider access to affordable housing among public sector pensioners in Kenya.

“The tax burden is high,” Naomi Gichana, legal officer at RBA told Real Estate in an interview.

According to her, there has been low uptake by the targeted group because a majority of the members have also not accumulated enough or have already accessed their benefits.

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